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Friday, January 28, 2011

Change -0.1810 (-0.23%) prices closed lower than they opened. with weak Bids going into the close.

A doji star occurred (where a doji gaps above or below the previous candle). This often signals a reversal with confirmation occurring on the next bar.A long upper shadow occurred. This is typically a bearish signal (particularly when it occurs near a high price level, at resistance level, or when the security is overbought).Three black candles occurred in the last three days. Although these candles were not big enough to create three black crows, the steady downward pattern is bearish.

MARKET SENTIMENTPulseScan Swing Vix

PulseScan: -43.67Swing Vix: -42.68

The Market Pulse is negative since it is trading below its zero signal line.The PulseScan crossed below the Swing Vix creating a DOWN Trend Channel as of 11 period(s) ago. The Swing Vix is below -39. This is where it usually bottoms. The Swing Vix usually forms tops and bottoms before the underlying security. A buy or sell signal is generated when the Swing Vix moves out of an overbought/oversold area.

*The last signal was a Over-Bought Sell 39 period(s) Ago.The Swing Vix has just reached its lowest value in the last 14 period(s). This is bearish. *Since the last Swing Vix signal, $DX - US DOLLAR INDEX ICE Continuous's price has decreased 2.99%, and has ranged from a high of 81.1450 to a low of 77.7100.

MOMENTUM

MARKET TREND - Currently the TREND is .There is currently no trend reading at this time.

TREND STRENGTH - WEAK - RANGE BOUND (Prices have ceased trending and have become consolidated at this time) The market has put in a short term bottom. This means that the bears are liquidating short positions thus taking some profit off the table.,

TRENDLINE RETRACEMENTThe close is currently Below it's PulseWave Cycle TRENDLINE RETRACEMENT. - 82.0175The close is currently Below it's Long Term TRENDLINE RETRACEMENT. - 80.6336The close is currently Below it's Intermediate Term TRENDLINE RETRACEMENT. - 79.5904 The close is currently Below it's Short Term TRENDLINE RETRACEMENT. - 78.7008

Change with weak Bids going into the close. 4.3896 (0.04%) prices closed higher than they opened.

A spinning top occurred (a spinning top is a candle with a small real body). Spinning tops identify a session in which there is little price action (as defined by the difference between the open and the close). During a rally or near new highs, a spinning top can be a sign that prices are losing momentum and the bulls may be in trouble.

MARKET SENTIMENTPulseScan Swing Vix

PulseScan: 44.59Swing Vix: 44.25

The Market Pulse is positive since it is trading above its zero signal line.The PulseScan crossed above the Swing Vix creating a UP Trend Channel as of 8 period(s) ago. The Swing Vix is above 39. This is where it usually tops. The Swing Vix usually forms tops and bottoms before the underlying security. A buy or sell signal is generated when the Swing Vix moves out of an overbought/oversold area.

*The last signal was a Over-Bought Sell 18 period(s) Ago.The Swing Vix has just reached its highest value in the last 14 period(s). This is bullish. *Since the last Swing Vix signal, $DJI - YM Mini Dow Jones FUTURES's price has increased 1.72% , and has ranged from a high of 12,020.5195 to a low of 11,698.8301.

TRENDLINE RETRACEMENTThe close is currently Above it's PulseWave Cycle TRENDLINE RETRACEMENT. - 10,817.4199The close is currently Above it's Long Term TRENDLINE RETRACEMENT. - 10,761.3105The close is currently Above it's Intermediate Term TRENDLINE RETRACEMENT. - 11,485.6768 The close is currently Above it's Short Term TRENDLINE RETRACEMENT. - 11,877.0518

MONTHLY PRICE PROJECTIONSBULL MARKET UPTREND - (12-18mo) PRICE TARGET = 14,426.7188Long term Trend Line resistance is currently at - 12,020.5195Long term Trend Line support is currently at - 10,817.4199

Change -2.4100 (-2.75%) prices closed lower than they opened. with weak Bids going into the close.This is bearish, as prices closed significantly lower than they opened. If the candle appears when prices are "high," it may be the first sign of a top. If it occurs when prices are confronting an overhead resistance area the long black candle adds credibility to the resistance. Similarly, if the candle appears as prices break below a support area, the long black candle confirms the failure of the support area.

MARKET SENTIMENTPulseScan Swing Vix

PulseScan: -36.31Swing Vix: -32.98

The Market Pulse is negative since it is trading below its zero signal line.The PulseScan crossed below the Swing Vix creating a DOWN Trend Channel as of 6 period(s) ago. The Swing Vix is below -29. This is where it usually forms Support. The Swing Vix usually forms Support before the underlying security. A buy or sell signal is generated when the Swing Vix moves out of an overbought/oversold area.

*The last signal was a Over-Bought Sell 20 period(s) Ago.The Swing Vix has just reached its lowest value in the last 14 period(s). This is bearish. *Since the last Swing Vix signal, $CL - LIGHT CRUDE COMPOSITE Continuous's price has decreased 4.11%, and has ranged from a high of 90.8600 to a low of 85.2100.

MOMENTUM

MARKET TREND - Currently the TREND is - Neutral within the Bullish KUMO Consolidation cloud (Possible Trend Reversal) with Downside Bearish Breakout risk. A close above 87.1225 is needed to re-establish the upward trend. However A close below 85.0250 will establish a new downward trend.

TREND STRENGTH - ,There is currently no trend strength reading at this time.

TRENDLINE RETRACEMENTThe close is currently Above it's PulseWave Cycle TRENDLINE RETRACEMENT. - 78.4100The close is currently Above it's Long Term TRENDLINE RETRACEMENT. - 79.8441The close is currently Below it's Intermediate Term TRENDLINE RETRACEMENT. - 87.3579 The close is currently Below it's Short Term TRENDLINE RETRACEMENT. - 88.4443

Change -30.0000 (-2.23%) prices closed lower than they opened. with weak Bids going into the close.This is bearish, as prices closed significantly lower than they opened. If the candle appears when prices are "high," it may be the first sign of a top. If it occurs when prices are confronting an overhead resistance area the long black candle adds credibility to the resistance. Similarly, if the candle appears as prices break below a support area, the long black candle confirms the failure of the support area.

An engulfing bearish line occurred (where a black candle's real body completely contains the previous white candle's real body). The engulfing bearish pattern is bearish during an uptrend. It then signifies that the momentum may be shifting from the bulls to the bears.

If the engulfing bearish pattern occurs during a downtrend (which appears to be the case with $XAU/USD - GOLD Spot), it may be a last engulfing bottom which indicates a bullish reversal. The test to see if this is the case is if the next candle closes above the bottom the current (black) candle's real body.

MARKET SENTIMENTPulseScan Swing Vix

PulseScan: -38.05Swing Vix: -38.28

The Market Pulse is negative since it is trading below its zero signal line.The PulseScan crossed above the Swing Vix creating a UP Trend Channel as of 1 period(s) ago. A buy or sell signal is generated when the Swing Vix moves out of an overbought/oversold area.

*The last signal was a Over-Sold Buy 1 period(s) Ago.The Swing Vix does not currently show any Failure Swings.The security price has set a new 14-period low while the Swing Vix has not. This is a bullish divergence. Since the PulseScan leads the market 3-5 days out we will wait to see if an upside breakout occurs. *Since the last Swing Vix signal, $XAU/USD - GOLD Spot's price has decreased 2.23%, and has ranged from a high of 1,349.0000 to a low of 1,311.0000.

MOMENTUM

MARKET TREND - Currently the TREND is - The UpTrend is still entact with prices holding above trendline support at- 1,246.7400.

TREND STRENGTH - ,There is currently no trend strenght reading at this time.

TRENDLINE RETRACEMENTThe close is currently Above it's PulseWave Cycle TRENDLINE RETRACEMENT. - 1,246.7400The close is currently Above it's Long Term TRENDLINE RETRACEMENT. - 1,261.5083The close is currently Below it's Intermediate Term TRENDLINE RETRACEMENT. - 1,363.9834 The close is currently Below it's Short Term TRENDLINE RETRACEMENT. - 1,348.0730

Thursday, January 27, 2011

General Advice Disclosure: Please note that the advice contained herein is general advice and is for the purposes of education only. The risk of loss in trading futures contracts, commodity options, stocks, stock options and forex currencies can be substantial, and therefore investors should understand the risks involved in taking leveraged positions and must assume responsibility for the risks associated with such investments and for their results. You are reminded that past performance is no guarantee or reliable indication of future results. It has not been prepared taking into account your particular investment objectives, financial situation and particular needs.You should therefore assess whether the advice is appropriate to your individual investment objectives, financial situation and particular needs. You should do this before making an investment decision based on this general advice. You can either make the assessment yourself or seek the help of a professional adviser.This commentary is not a recommendation to buy or sell, but rather a guideline to interpreting the specified indicators. This information should only be used by investors who are aware of the risk inherent in securities trading. The Vulcan Report accepts no liability whatsoever for any loss arising from any use of this expert or its contents.liability whatsoever for any loss arising from any use of this expert or its contents.For Related news and other stories please visit - http://www.wideawakenews.com/For Related videos on our Youtube channel please visit - http://www.youtube.com/user/pulsescan72Be Sure to register for faster updates and commentaries at -BLOG 1: - http://pulsescan.blogspot.com/BLOG 2: - http://seekingalpha.com/instablog/466159-pulsescan72/BULLS make money... BEARS make money.... PIGS get slaughtered!"TAKE WHAT YOU CAN .........GIVE NOTHING BACK"!!

Change 0.9000 (2.80%) prices closed higher than they opened. with strong Bids going into the close.

MARKET SENTIMENTPulseScan Swing Vix

PulseScan: -25.71Swing Vix: -27.58

The Market Pulse is negative since it is trading below its zero signal line.The PulseScan crossed above the Swing Vix creating a UP Trend Channel as of 0 period(s) ago.This means that positive momentum has entered the market. Expect sideways to higher prices within the next 3-5 days The Swing Vix is not currently in a topping (above 39) or bottoming (below -39) range. A buy or sell signal is generated when the Swing Vix moves out of an overbought/oversold area.

*The last signal was a Over-Bought Sell 79 period(s) Ago.The Swing Vix does not currently show any Failure Swings.The Swing Vix and price are not diverging. *Since the last Swing Vix signal, CHINA - ACI - ARCH COAL ORD's price has been unchanged, and has ranged from a high of 33.3200 to a low of 32.3440.

MOMENTUM

MARKET TREND - Currently the TREND is Slightly Bullish - .

TREND STRENGTH - WEAK - RANGE BOUND (Prices have ceased trending and have become consolidated at this time) The market has put in a short term top. This means that the bulls are liquidating long positions thus taking some profit off the table.,

TRENDLINE RETRACEMENTThe close is currently Above it's PulseWave Cycle TRENDLINE RETRACEMENT. - 27.7950The close is currently Above it's Long Term TRENDLINE RETRACEMENT. - 26.2514The close is currently Above it's Intermediate Term TRENDLINE RETRACEMENT. - 31.7283 The close is currently Below it's Short Term TRENDLINE RETRACEMENT. - 33.0236

VOLATILITYOn 1/26/2011, CHINA - ACI - ARCH COAL ORD closed above the lower band by 29.2%.This combined with the steep downtrend suggests that the downward trend in prices has a good chance of continuing. However, a short-term pull-back inside the bands is likely.

Change 6.0200 (5.09%) prices closed higher than they opened. with strong Bids going into the close.This is generally considered bullish, as prices closed significantly higher than they opened. If the candle appears when prices are "low," it may be the first sign of a bottom. If it occurs when prices are rebounding off of a support area , the long white candle adds credibility to the support. Similarly, if the candle appears during a breakout above a resistance area, the long white candle adds credibility to the breakout.

An engulfing bullish line occurred (where a white candle's real body completely contains the previous black candle's real body). The engulfing bullish pattern is bullish during a downtrend (which appears to be the case with $AGQ - PROSHARES ULTRA SILVER ETF). It then signifies that the momentum may be shifting from the bears to the bulls.

If the engulfing bullish pattern occurs during an uptrend, it may be a last engulfing top which indicates a top. The test to see if this is the case is if the next candle closes below the top of the current (white) candle's real body.

MARKET SENTIMENTPulseScan Swing Vix

PulseScan: -41.94Swing Vix: -41.92

The Market Pulse is negative since it is trading below its zero signal line.The PulseScan crossed below the Swing Vix creating a DOWN Trend Channel as of 5 period(s) ago. The Swing Vix is below -39. This is where it usually bottoms. The Swing Vix usually forms tops and bottoms before the underlying security. A buy or sell signal is generated when the Swing Vix moves out of an overbought/oversold area.

*The last signal was a Over-Bought Sell 15 period(s) Ago.The Swing Vix does not currently show any Failure Swings.The Swing Vix and price are not diverging. *Since the last Swing Vix signal, $AGQ - PROSHARES ULTRA SILVER ETF's price has decreased 8.63%, and has ranged from a high of 143.0700 to a low of 116.7700.

MOMENTUM

MARKET TREND - Currently the TREND is - The UpTrend is still entact with prices holding above trendline support at- 101.4995.

TREND STRENGTH - ,There is currently no trend strenght reading at this time.

TRENDLINE RETRACEMENTThe close is currently Above it's PulseWave Cycle TRENDLINE RETRACEMENT. - 101.4995The close is currently Above it's Long Term TRENDLINE RETRACEMENT. - 90.2492The close is currently Below it's Intermediate Term TRENDLINE RETRACEMENT. - 128.6292 The close is currently Below it's Short Term TRENDLINE RETRACEMENT. - 128.4193

VOLATILITYOn 1/26/2011, $AGQ - PROSHARES ULTRA SILVER ETF closed above the lower band by 19.9%.This combined with the steep downtrend suggests that the downward trend in prices has a good chance of continuing. However, a short-term pull-back inside the bands is likely.

Change 0.6900 (2.57%) prices closed higher than they opened. with strong Bids going into the close.

An engulfing bullish line occurred (where a white candle's real body completely contains the previous black candle's real body). The engulfing bullish pattern is bullish during a downtrend (which appears to be the case with $XAG/USD - SILVER Spot). It then signifies that the momentum may be shifting from the bears to the bulls.

If the engulfing bullish pattern occurs during an uptrend, it may be a last engulfing top which indicates a top. The test to see if this is the case is if the next candle closes below the top of the current (white) candle's real body.

MARKET SENTIMENTPulseScan Swing Vix

PulseScan: -38.85Swing Vix: -39.03

The Market Pulse is negative since it is trading below its zero signal line.The PulseScan crossed above the Swing Vix creating a UP Trend Channel as of 0 period(s) ago.This means that positive momentum has entered the market. Expect sideways to higher prices within the next 3-5 days However, the Swing Vix just crossed above -39 from a bottoming formation. This is a bullish sign. A buy or sell signal is generated when the Swing Vix moves out of an overbought/oversold area.

*The last signal was a Over-Sold Buy 0 period(s) Ago.The Swing Vix does not currently show any Failure Swings.The Swing Vix and price are not diverging. *Since the last Swing Vix signal, $XAG/USD - SILVER Spot's price has been unchanged, and has ranged from a high of 27.6400 to a low of 26.6500.

MOMENTUM

MARKET TREND - Currently the TREND is - Neutral within the Bullish KUMO Consolidation cloud (Possible Trend Reversal) with Downside Bearish Breakout risk. A close above 28.4300 is needed to re-establish the upward trend. However A close below 26.7550 will establish a new downward trend.

TREND STRENGTH - ,There is currently no trend strength reading at this time.

TRENDLINE RETRACEMENTThe close is currently Above it's PulseWave Cycle TRENDLINE RETRACEMENT. - 23.0900The close is currently Above it's Long Term TRENDLINE RETRACEMENT. - 22.4332The close is currently Below it's Intermediate Term TRENDLINE RETRACEMENT. - 27.6783 The close is currently Below it's Short Term TRENDLINE RETRACEMENT. - 27.9028

VOLATILITYOn 1/26/2011, $XAG/USD - SILVER Spot closed above the lower band by 22.2%.This combined with the steep downtrend suggests that the downward trend in prices has a good chance of continuing. However, a short-term pull-back inside the bands is likely.

What in the world is happening to America? The things that you are about to see in the videos posted in this article are so disturbing and so violent that it is hard to believe that it is actually Americans that are doing this to one another. Once upon a time, Americans generally conducted themselves with humility, grace, civility, honor and with a tremendous amount of respect for others. Sadly, those days are now long gone. Now, large numbers of people in this country are just going wild. Unfortunately, the videos you are about to watch are not isolated incidents. Stuff like this is going on all over the country. So what is going to happen when the economy collapses and shortages begin? What kind of violence and rioting should we expect to see at that point? Just recall what we witnessed in the aftermath of Hurricane Katrina. Sadly, if the videos below are any indication, the thin facade of civilization that we all take for granted every day could completely disintegrate in the event of a major economic catastrophe.

Today, society actually teaches our young people to be disrespectful and rude. Arrogance and violent behavior are glorified in our movies, on television and in our music. Our culture is literally degenerating right in front of our eyes. The whole country seems to become more selfish, more self-centered and more greedy every single day. In such an environment, is it any wonder that our young people are exhibiting such extreme behaviors?

The violence that you are about to see is very disturbing because it is real. If you spend most of your time isolated in your own little world, these scenes of brawling and violence will probably come as a great shock to you. But this is what is really happening in the United States of America today.

The following are 4 restaurant brawl videos that are so wild that you won’t believe that they actually happened in America….

#1 IHOP Brawl

#2 McDonalds Brawl In San Francisco

#3 Wild Scene At Denny’s

#4 Huge Brawl In Front Of A Restaurant In New York City

*Bonus* Wild Brawl In The Parking Lot Of An Ocala, Florida Gas Station

If people are willing to go so wild while times are still relatively good, what in the world is going to happen if a major disaster strikes or the economy collapses and they have been without food for two or three days?

This is something that we all really need to consider. In the United States today, there are millions of people with no jobs, no hope and no future. The mainstream media keeps promising that an “economic recovery” is right around the corner and most Americans are desperately hoping that 2011 will be better, but you can almost feel the frustration of the American people rising.

We live in a country today that is very frustrated and very angry. Some of that anger and frustration is rational, but a whole lot of it is irrational. Most Americans have been brought up to believe that they are entitled to “a good life”, and when that doesn’t happen they start behaving like spoiled little brats.

If some major emergency comes along that pushes the U.S. economy over the edge, it could cause massive societal upheaval. There wouldn’t be close to enough law enforcement personnel in the entire country to be able to handle the rioting and looting that we could potentially see.

Back during the Great Depression of the 1930s, the American people were able to pull through because our citizens still possessed a great deal of character. But today many Americans are incredibly spoiled. Many Americans believe that they are entitled to everything and that life is all about them. They are in love with themselves, they are in love with money and wealth, they are arrogant and boastful, they don’t respect their parents, they are addicted to entertainment, they have very little self-control and they have very little love for others.

Fortunately, there are also many Americans that still have good hearts, that are willing to fight for the truth and that are willing to live for something greater than themselves.

This is one of the most extraordinary times in all of human history to be alive, and as I noted in a previous article, it is those that are willing to live life unselfishly that will be pleased with the legacy that they have left behind….

When I was young, someone told me the following: “Life is like a coin – you can spend it any way that you want, but you can only spend it once.” So how are you spending your life? Are you just “killing time” and watching world events go by or are you actively trying to make a difference? When your life is over, will you be proud of the legacy that you have left, or will you be ashamed of what you have done with the time that you were given? None of us can go back now and change what we have done in the past, but the future stands unwritten before us. The remaining chapters of your life can be a beautiful thing – but only if you are courageous enough to seize the day.

We are going to need leaders that are going to be able to keep it together when times get tough in the years ahead. When most people realize that the “good times” are gone forever, they are absolutely going to lose it. Many people are going to totally freak out.

But if you are willing to embrace the challenges ahead instead of letting them swamp you with anger and desperation, then the coming years could become a great time of victory and adventure for you.

So what do you think about the crazy videos that you just viewed above? Do you think that Americans are emotionally prepared for an economic collapse? Why do you think people are suddenly acting so crazy?

Wednesday, January 26, 2011

General Advice Disclosure: Please note that the advice contained herein is general advice and is for the purposes of education only. The risk of loss in trading futures contracts, commodity options, stocks, stock options and forex currencies can be substantial, and therefore investors should understand the risks involved in taking leveraged positions and must assume responsibility for the risks associated with such investments and for their results. You are reminded that past performance is no guarantee or reliable indication of future results. It has not been prepared taking into account your particular investment objectives, financial situation and particular needs.You should therefore assess whether the advice is appropriate to your individual investment objectives, financial situation and particular needs. You should do this before making an investment decision based on this general advice. You can either make the assessment yourself or seek the help of a professional adviser.This commentary is not a recommendation to buy or sell, but rather a guideline to interpreting the specified indicators. This information should only be used by investors who are aware of the risk inherent in securities trading. The Vulcan Report accepts no liability whatsoever for any loss arising from any use of this expert or its contents.liability whatsoever for any loss arising from any use of this expert or its contents.For Related news and other stories please visit - http://www.wideawakenews.com/For Related videos on our Youtube channel please visit - http://www.youtube.com/user/pulsescan72Be Sure to register for faster updates and commentaries at -BLOG 1: - http://pulsescan.blogspot.com/BLOG 2: - http://seekingalpha.com/instablog/466159-pulsescan72/BULLS make money... BEARS make money.... PIGS get slaughtered!"TAKE WHAT YOU CAN .........GIVE NOTHING BACK"!!

Change -0.0600 (-0.22%) prices closed lower than they opened. with strong Bids going into the close.

A long lower shadow occurred. This is typically a bullish signal (particularly when it occurs near a low price level, at a support level, or when the security is oversold).A spinning top occurred (a spinning top is a candle with a small real body). Spinning tops identify a session in which there is little price action (as defined by the difference between the open and the close). During a rally or near new highs, a spinning top can be a sign that prices are losing momentum and the bulls may be in trouble.

MARKET SENTIMENT

PulseScan Swing Vix

PulseScan: -40.53Swing Vix: -39.39

The Market Pulse is negative since it is trading below its zero signal line.The PulseScan crossed below the Swing Vix creating a DOWN Trend Channel as of 8 period(s) ago. The Swing Vix is below -39. This is where it usually bottoms. The Swing Vix usually forms tops and bottoms before the underlying security. A buy or sell signal is generated when the Swing Vix moves out of an overbought/oversold area.

*The last signal was a Over-Bought Sell 15 period(s) Ago.The Swing Vix has just reached its lowest value in the last 14 period(s). This is bearish. *Since the last Swing Vix signal, $XAG/USD - SILVER Spot's price has decreased 6.44%, and has ranged from a high of 29.8100 to a low of 26.5400.

MOMENTUM

MARKET TREND - Currently the TREND is - Neutral within the Bullish KUMO Consolidation cloud (Possible Trend Reversal) with Downside Bearish Breakout risk. A close above 28.4175 is needed to re-establish the upward trend. However A close below 26.7550 will establish a new downward trend.

TREND STRENGTH - ,There is currently no trend strenght reading at this time.

TRENDLINE RETRACEMENTThe close is currently Above it's PulseWave Cycle TRENDLINE RETRACEMENT. - 22.9500The close is currently Above it's Long Term TRENDLINE RETRACEMENT. - 22.4011The close is currently Below it's Intermediate Term TRENDLINE RETRACEMENT. - 27.6964The close is currently Below it's Short Term TRENDLINE RETRACEMENT. - 28.0711

VOLATILITYOn 1/25/2011, $XAG/USD - SILVER Spot closed above the lower band by 4.7%.This combined with the steep downtrend suggests that the downward trend in prices has a good chance of continuing. However, a short-term pull-back inside the bands is likely.

Financial history teaches that market prices are not just subject to cyclical fluctuations — mainly following the business cycle. They are also liable to much longer lasting secular trends, often spanning 15 years, 20 years or longer. These secular cycles are visible in stocks, commodities, bonds and precious metals.

Take gold as an example …

Gold experienced a secular bull market starting in the late 1960s and culminating in a spectacular high in 1980. What followed was a severe secular bear market lasting roughly 20 years. Then, around the turn of the millennium, another secular bull market got going.

I believe gold’s current secular bull market probably has much further to go. And since bull market corrections are buying opportunities you should use them as such.

That might sound easier than it is to do. Buying into nerve wrenching corrections can be a tough pill to swallow. But it’s much easier if you have some strong arguments at hand.

Let me give you 13 of them:

Reason #1

A Global Debt Crisis Has Broken Out

No matter where you look — Europe, Japan, or the U.S. — the same dire picture shows up: Mountains of government debt plus larger mountains of unfunded liabilities. Many of the modern welfare state’s promises will be broken sooner or later. The easiest way to kick this can down the road is by printing money.

The second option is outright default …

In that case government bondholders would have to bear the losses. This is a much more honest and evenhanded way of dealing with the inevitable, because those who have willingly taken the risk of lending money to over-indebted governments and have received interest payments as long as the going was good should bear the losses if things turn sour. Unfortunately our political elite seem set on averting this outcome at any cost.

Reason #2

The Quest for a Weak Currency
Has Become Respectable

Not too long ago most economists and even everyday people knew that economic development and the creation of wealth went hand-in-hand with a strong and strengthening currency.

This knowledge seems to be lost. A global currency war has started; sabotaging thy neighbor’s policies via currency depreciation is common.

Gold is insurance against this loss of relative wealth on an international scale.

Reason #3

Derivatives Are Hanging Like a “Sword of Damocles” over the Financial System

Derivatives have grown exponentially during the past 20 years. They have yet to withstand a real stress test. The panic after hedge fund LTCM went bust in 1998 or the case of AIG may be harbingers of what to expect.

Reason #4

U.S. Fed Chairman Bernanke Is a Stated Inflationist

Fed chairman Bernanke has no qualms in keeping the printing presses rolling 24/7.

Alan Greenspan, Ben Bernanke’s predecessor as Fed chairman, tried to cultivate an image of being a sound money advocate. Covertly he did the exact opposite!

Not so Mr. Bernanke …

From the beginning of his career as a central banker he has openly declared his clear convictions as an inflationist. For him the printing press is the universal remedy of each and every economic problem as he made clear in his famous November 2002 speech: “Deflation: Making Sure It Doesn’t Happen Here.”

Reason #5

The Current Monetary System Has Entered Its Endgame Phase

History shows that monetary systems are mortal. They come and they go. The current system of fiat money backed by government monopolies has been in existence since August 1971. And it’s a huge economic experiment, probably the largest since communists took over Russia in 1917.

The weaknesses of this monetary system, especially the ease of government manipulation, are getting more obvious by the day.

Reason #6

Markets May Force the Return to a Sound Monetary System

When confidence in a monetary system is lost, it is very difficult to regain it. A disappointed and deceived population won’t fall for the same political promises that were just broken. They’ll insist on something reliable.

If this were to happen, gold would naturally reemerge as the basis of a new and sound monetary order. This reasoning may actually explain why gold is still in the coffers of most central banks, even the Fed’s.

Reason #7

Gold Is Coming Back as an Asset Class

Globally, gold holdings make up only 1 percent of all financial assets. Not too long ago 5 percent to 10 percent was typical for conservative investors. And most institutional investors are totally out of gold. With the above mentioned problems gaining more and more publicity gold may see a revival as an asset class.

Demand for gold in emerging markets is exploding.

Rising gold prices have also sparked interest. And the introduction of ETFs has paved the way for individual investors to easily add gold to their portfolios … even their IRAs.

Reason #8

Growing Emerging Market Wealth Leads to an Increase in Gold Demand

China, India, Brazil — the largest emerging economies — are booming. And it looks like a durable long-term shift to more growth and wealth has emerged. Consequently, investment and jewelry demand for gold are also growing.

Plus, China has step-by-step allowed its citizens to buy the precious metal.

Reason #9

Central Bank Bureaucrats Are Rethinking Their Stance

Global gold supply did not match demand in the recent past. Sales by central banks filled the gap. But now, with rising gold prices, central bank bureaucrats have started to rethink their stance …

Most have actually stopped selling. And those of emerging economies — India, South Africa, China, Russia and Argentina — have started buying relatively huge amounts.

Reason #10

Gold Mining Production Is Stagnating at Best

Despite rising prices, gold mining supply has hardly budged during recent years. The easy to exploit mines — the huge deposits — are already in production. In short, it’s getting more and more difficult to find enough new gold.

It’s becoming more difficult and more expensive to mine gold.

Reason #11

Gold Mining Is Getting More and More Expensive

It’s not only getting harder to find new exploitable deposits, it’s also costing more to get the metal out of the earth. The most important factors of production are becoming more expensive, especially energy, the same for manpower in emerging countries. Environmental costs are also soaring.

Plus miners have to use more expensive technology for extracting gold from difficult locations, since the easy ones, as noted above, are already in production.

Reason #12

Gold Is Still Cheap

The global money supply has increased dramatically during the past decade, especially since 2008. And if you use money supply as a reference to value gold, the precious metal is still very cheap.

For example, if M1 were taken as the basis of a new 100 percent gold standard monetary system in the U.S., gold’s price would be anchored at $6,910 per ounce.

The same reasoning for Euroland gets us to €13,628 per ounce using Europe’s M1 money supply.

Relative to other asset classes gold is also cheap. The Dow to gold ratio is currently at 8.3. Historically it has been as low as 1 and even lower.

Reason #13

The Current Secular Up Trend Has More Leeway

During secular bull markets prices usually go up by a factor of at least 10 to 15.

Just think, during the last secular bull market the Dow rose from 800 in 1982 to 12,000 in 2000. Same thing for gold during the 1970s: From $35 per ounce to $850. And based on all the reasons I’ve given you today, gold’s current bull market should achieve similar magnitude.

Of course, there will be corrections along the way — even cruel ones. To give you an example: In 1974 gold declined more than 40 percent. But since the drivers of that bull market were still valid, even that slump turned out to be a buying opportunity.

The Vulcan Report - The Coming Collapse of the entire free market system

About Me

I worked on Wall Street for many years as a Systems developer and Money Manager. Presently a hired gun, running a private equity fund. I work with a broad base of private funds and am very selective in whom I ACCEPT as a client. My services are not normally open to the general public due to the secure nature of what I do. I extract large sums of money out of the markets on a regular basis. You can send me a private message to further discuss arrangements. I generally don't discriminate based on account size. However, this is not for everyone. SERIOUS INQUIRES ONLY!!!

This commentary is not a recommendation to buy or sell, but rather a guideline to interpreting the specified indicators. This information should only be used by investors who are aware of the risk inherent in securities trading. The Vulcan Report accepts no liability whatsoever for any loss arising from any use of this expert or its contents.liability whatsoever for any loss arising from any use of this expert or its contents.